Educational Assistance Programs and Service Members Occupational Conversion and Training Act Program

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AH31

Educational Assistance Programs and Service Members Occupational

Conversion and Training Act Program

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends the educational assistance regulations

and the Service Members Occupational Conversion and Training Act

(SMOCTA) regulations. It restates statutory provisions of the Veterans'

Benefits Improvement Act of 1994 and the National Defense Authorization

Act for Fiscal Year 1995. It also makes changes to set forth statutory

interpretations of the Department of Veterans Affairs (VA), to reflect

current organizational structure within VA, and to provide

clarification. These changes affect the Survivors' and Dependents'

Educational Assistance program, the Montgomery GI Bill--Active Duty

program, the Montgomery GI Bill--Selected Reserve program, the SMOCTA

program, and the Post-Vietnam Era Veterans' Educational Assistance

program (VEAP).

EFFECTIVE DATE: This final rule is effective June 10, 1996. For more

information concerning the application of the provisions of the final

rule, see the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: June C. Schaeffer, Assistant Director

for Policy and Program Administration, Education Service, Veterans

Benefits Administration, (202) 273-7187.

SUPPLEMENTARY INFORMATION: This document amends regulations in 38 CFR

Part 21. It amends educational assistance regulations concerning the

Survivors' and Dependents' Educational Assistance program in subpart C

and the Montgomery GI Bill--Active Duty program in subpart K. Also,

this document makes changes to the administrative provisions in subpart

D that affect the Survivors' and Dependents' Educational Assistance

program, the Montgomery GI Bill--Active Duty program, the Montgomery GI

Bill--Selected Reserve program, and VEAP. Further, this document amends

the SMOCTA regulations in subpart F-3.

The Veterans' Benefits Improvement Act of 1994 (Pub. L. 103-446)

contains many provisions that affect the Montgomery GI Bill--Active

Duty program. These include making vocational flight training

permanently available under the Montgomery GI Bill--Active Duty

program; permitting approval of alternative teacher certification

programs for training under the Montgomery GI Bill--Active Duty

program; eliminating VA's authority to functionally supervise State

approving agencies; restricting approved correspondence courses to

accredited courses; and permitting approval of programs of education

offered by foreign educational institutions when those programs include

courses offered away from the institution's main campus. Accordingly,

the regulations in subparts D and K are amended to incorporate the

statutory changes.

Pursuant to Pub. L. 103-446, the provisions concerning alternative

teacher certification do not apply to the Survivors' and Dependents'

Educational Assistance program, and regulations in subpart C governing

that program are revised to clarify that fact. The provisions of Pub.

L. 103-446 also provide that certain recipients of Survivors' and

Dependents' Educational Assistance in the Philippines who were being

paid at the rate equivalent to 50 cents on the dollar in Philippine

pesos will now be paid in U.S. dollars. The regulations in subpart C

are amended accordingly. We also made various changes to SMOCTA

regulations in subpart F-3 to reflect the statutory changes made by

Pub. L. 103-446. In this regard, the SMOCTA regulations are amended by

eliminating the prohibition against training programs that lasted more

than 18 months, by eliminating provisions that required a two week wait

before a veteran could begin a training program, and by adding an

aggregate limit of not more than $10,000 or $12,000, as applicable,

that could be paid to employers when a trainee was in more than one

training program.

The National Defense Authorization Act for Fiscal Year 1995 (Pub.

L. 103-337) contains provisions permitting additional members of the

Coast Guard to qualify for the Montgomery GI Bill--Active Duty program.

The regulations in subpart K are amended to reflect the statutory

change.

VA is prohibited by statute from approving the enrollment of an

eligible veteran in a course if 85% or more of the students enrolled in

the course are VA-supported. In this regard, vocational flight training

is now a permanent part of the Montgomery GI Bill--Active Duty program,

the Montgomery GI Bill--Selected Reserve program, and VEAP. The

regulations are amended by providing that solo flight training and

training in flight simulators are to be included in the calculations

for determining whether the 85%-15% requirement has been met in flight

courses. This is necessary since in our

[[Page 29295]]

view 38 U.S.C. 3680A(d) requires that when educational assistance may

be paid to eligible veterans for any courses, those courses are subject

to the 85%-15% requirement.

The regulations in subpart D are amended by eliminating references

to the Director, Vocational Rehabilitation and Education Service, a

position that no longer exists; by removing an obsolete reference to

eligibility requirements under the old Vietnam Era GI Bill from the

regulations concerning training in foreign schools, since there no

longer is any eligibility under the Vietnam Era GI Bill; and

clarifying, consistent with the requirements of Pub. L. 103-446, that a

person eligible under the Montgomery GI Bill--Active Duty program and

the Montgomery GI Bill--Selected Reserve program may train in foreign

schools.

Pub. L. 103-446 contains a provision that requires any entity

offering an alternative teacher certification program to be considered

to be an educational institution for VA purposes during the period

beginning on November 2, 1994, and ending on September 30, 1996. This

document amends subparts D and K to reflect this statutory change.

This document also amends subparts D and K by adding a definition

of ``alternative teacher certification program'' as follows:

The term alternative teacher certification program, for the

purposes of determining whether an entity offering such a program is

a school, educational institution or institution as defined in * * *

this section, means a program leading to a teacher's certificate

that allows individuals with a bachelor's degree or graduate degree

to obtain teacher certification without enrolling in an institution

of higher learning.

We believe this is consistent with congressional intent.

The educational assistance regulations in subparts C, D, and K and

the SMOCTA regulations in subpart F-3 are further amended by making

other changes for purposes of clarification.

The restatements of statute and statutory interpretations of Pub.

L. 102-484 and Pub. L. 103-446 contained in this final rule will be

applied retroactively from the effective dates of the statutory

provisions. However, the revisions concerning the internal VA

reorganization and other clarifications will be applied from the

effective date of the rule. Dates of application for provisions covered

by this document are as follows:

Oct. 1, 1994: Sec. 21.7120.

Oct. 5, 1994: Sec. 21.7045.

Nov. 2, 1994: Secs. 21.3333, 21.4152, 21.4155, 21.4200, 21.4250(f),

21.4820, 21.4830, 21.4832, and 21.7020.

Jan. 31, 1995: Secs. 21.4252(e) and 21.4279.

June 10, 1996: Secs. 21.4201 and 21.4260.

This document makes no substantive changes. It restates statutory

provisions, sets forth statutory interpretations, reflects current

organizational structure within VA, and makes changes for

clarification. Accordingly, there is a basis for dispensing with prior

notice and comment and delayed effective date provisions of 5 U.S.C.

552 and 553.

The Secretary of Veterans Affairs hereby certifies that this final

rule will not have a significant economic impact on a substantial

number of small entities as they are defined in the Regulatory

Flexibility Act, 5 U.S.C. 601-612. This final rule makes no substantive

changes. Pursuant to 5 U.S.C. 605(b), this final rule, therefore, is

exempt from the initial and final regulatory flexibility analyses

requirements of sections 603 and 604.

The Catalog of Federal Domestic Assistance numbers for programs

affected by this final rule are 64.117, 64.120, and 64.124. No Catalog

of Federal Domestic Assistance number has been assigned to the

Montgomery GI Bill--Selected Reserve program or the training programs

under the Service Members Occupational Conversion and Training Act.

List of Subjects in 38 CFR Part 21

Administrative practice and procedure, Armed forces, Civil rights,

Claims, Colleges and universities, Conflict of interests, Defense

Department, Education, Employment, Grant programs--education, Grant

programs--veterans, Health care, Loan programs--education, Loan

programs--veterans, Manpower training programs, Reporting and

recordkeeping requirements, Schools, Travel and transportation

expenses, Veterans, Vocational education, Vocational rehabilitation.

Approved: May 31, 1996.

Jesse Brown,

Secretary of Veterans Affairs.

For the reasons set out in the preamble, 38 CFR part 21 is amended

as set forth below.

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart C--Survivors' and Dependents' Educational Assistance Under

38 U.S.C. Chapter 35

1. The authority citation for subpart C is revised to read as

follows:

Authority: 38 U.S.C. 501(a), 512, 3500-3566, unless otherwise

noted.

2. In Sec. 21.3021, paragraph (k) is redesignated as paragraph (l);

and new paragraph (k) is added and newly redesignated paragraph (l) is

revised, to read as follows:

Sec. 21.3021 Definitions.

* * * * *

(k) School, educational institution, institution. The terms school,

educational institution and institution mean:

(1) A vocational school or business school;

(2) A junior college, teachers' college, college, normal school,

professional school, university, or scientific or technical

institution;

(3) A public or private secondary school;

(4) A training establishment as defined in Sec. 21.4200(c); or

(5) An institution that provides specialized vocational training,

generally recognized as on the secondary school level or above, for

people with mental or physical disabilities.

(Authority: 38 U.S.C. 3501(a)(6), 3535)

* * * * *

(l) Additional definitions. The definitions of all terms that are

defined in Sec. 21.4200 but that are not defined in this section apply

to subpart C of this part.

(Authority: 38 U.S.C. 501, 3501)

* * * * *

3. In Sec. 21.3333, paragraph (c) is revised to read as follows:

Sec. 21.3333 Rates.

* * * * *

(c) Payments made to eligible persons in the Republic of the

Philippines or to certain Filipinos. When the eligible person is

pursuing training at an institution located in the Republic of the

Philippines or when an eligible child's entitlement is based on the

service of a veteran in the Philippine Commonwealth Army, or as a

Philippine Scout as defined in Sec. 3.8(b), (c), or (d) of this

chapter, payments of special training allowance made after December 31,

1994, will be made at the rate of 50 cents for each dollar authorized.

(Authority: 38 U.S.C. 3532(d), 3542, 3565)

* * * * *

Subpart D--Administration of Educational Assistance Programs

4. The authority citation for subpart D continues to read as

follows:

Authority: 10 U.S.C. ch. 1606; 38 U.S.C. 501(a), chs. 30, 32,

34, 35, 36, unless otherwise noted.

[[Page 29296]]

Sec. 21.4155 [Amended]

5. In Sec. 21.4152, paragraph (a) is amended by removing ``Except

as provided in Sec. 21.4155 of this part, no'' and adding, in its

place, ``No''.

Sec. 21.4152 [Amended]

6. In Sec. 21.4155, paragraph (b) is removed and paragraphs (c) and

(d) are redesignated as paragraphs (b) and (c), respectively.

7. In Sec. 21.4200, paragraph (a) is revised and paragraph (w) is

added, to read as follows:

Sec. 21.4200 Definitions.

(a) School, educational institution, institution. The terms school,

educational institution and institution mean:

(1) A vocational school or business school;

(2) A junior college, teachers' college, college, normal school,

professional school, university, or scientific or technical

institution;

(3) A public or private elementary school or secondary school;

(4) A training establishment as defined in paragraph (c) of this

section; or

(5) Any entity during the period beginning on November 2, 1994, and

ending on September 30, 1996, other than an institution of higher

learning, that provides training for completion of a State-approved

alternative teacher certification program.

(Authority: 38 U.S.C. 3452)

* * * * *

(w) Alternative teacher certification program. The term alternative

teacher certification program, for the purposes of determining whether

an entity offering such a program is a school, educational institution,

or institution as defined in paragraph (a)(5) of this section, means a

program leading to a teacher's certificate that allows individuals with

a bachelor's degree or graduate degree to obtain teacher certification

without enrolling in an institution of higher learning.

(Authority: 38 U.S.C. 3452(c))

* * * * *

8. In Sec. 21.4201, paragraph (e)(3)(ii) introductory text is

amended by removing ``part 141, Title 14, Code of Federal Regulations''

in each place and adding, in its place, ``14 CFR part 141''; paragraphs

(e)(3)(ii)(B) and (e)(3)(ii)(C) are removed; paragraphs (e)(3)(ii)(D)

and (e)(3)(ii)(E) are redesignated as paragraphs (e)(3)(ii)(B) and

(e)(3)(ii)(C), respectively; and the section heading and newly

redesignated paragraph (e)(3)(ii)(C) are revised to read as follows:

Sec. 21.4201 Restrictions on enrollment; percentage of students

receiving financial support.

* * * * *

(e) * * *

(3) * * *

(ii) * * *

(C) For students enrolled in courses not approved under 14 CFR part

141, such as courses offered by flight simulator or courses for

navigator or flight engineer, shall include ground training time or

charges; actual logged instructional flight time or charges; and

instructional time in a flight simulator or charges for that training.

(Authority: 10 U.S.C. 16136(c); 38 U.S.C. 3034(d), 3680A(d))

* * * * *

9. In Sec. 21.4252, paragraph (e) is revised and paragraph (f) is

added, to read as follows:

Sec. 21.4252 Courses precluded.

* * * * *

(e) Correspondence courses. (1) VA will not approve the enrollment

of an individual under 10 U.S.C. Chapter 1606 or 38 U.S.C. Chapter 30,

32, or 35 in a correspondence course or the correspondence portion of a

correspondence-residence course unless the course is accredited and

meets the requirements of Secs. 21.4253, 21.4256, and 21.4279, as

appropriate.

(2) VA will not approve the enrollment of an eligible child under

38 U.S.C. Chapter 35 in a correspondence course or the correspondence

portion of a correspondence-residence course.

(Authority: 38 U.S.C. 3534(b))

(f) Alternative teacher certification program. VA will not approve

the enrollment of an eligible person under 38 U.S.C. Chapter 35 in an

alternative teacher certification program unless that program is

offered by an institution of higher learning as defined in

Sec. 21.4200(h).

(Authority: 38 U.S.C. 3452(c), 3501(a)(6))

* * * * *

10. In Sec. 21.4260, paragraphs (b)(2), (b)(3)(ii)(B), (b)(5), and

(b)(6) are amended by removing ``Vocational Rehabilitation and'';

paragraph (c)(1) is amended by removing ``of eligible'' and adding, in

its place, ``or eligible''; and paragraphs (c)(1)(i), (c)(1)(ii), and

(c)(2) are revised to read as follows:

Sec. 21.4260 Courses in foreign countries.

* * * * *

(c) * * *

(1) * * *

(i) The eligible person, serviceperson, veteran, or reservist meets

the eligibility and entitlement requirements of either Secs. 21.3040

through 21.3046, Secs. 21.5040 and 21.5041, Secs. 21.7040 through

21.7045, or Sec. 21.7540, as appropriate;

(ii) The eligible person's, serviceperson's, veteran's, or

reservist's program of education meets the requirements of either

Sec. 21.3021(h), Sec. 21.5230, Sec. 21.7020(b)(23), or

Sec. 21.7520(b)(17), as appropriate; and

* * * * *

(2) VA may deny or discontinue the payment of educational

assistance allowance to a veteran, serviceperson, eligible person or

reservist pursuing a course in an institution of higher learning not

located in a State when VA finds that the veteran's, serviceperson's,

eligible person's, or reservist's enrollment is not in his or her best

interest or the best interest of the Federal Government.

(Authority: 38 U.S.C. 3687)

11. In Sec. 21.4279, paragraph (b) introductory text and paragraph

(b)(1) are revised to read as follows:

Sec. 21.4279 Combination correspondence-residence program.

* * * * *

(b) Payment for pursuit of a correspondence-residence program. The

rate of educational assistance payable to a spouse or surviving spouse

under 38 U.S.C. Chapter 35 for the residence portion of a

correspondence-residence course or program shall be computed as set

forth in Secs. 21.3131(a) and 21.4270.

(1) The charges for that portion of the course or program pursued

exclusively by correspondence will be in accordance with

Sec. 21.3131(a) with 1 month entitlement charged for each $404 of cost

reimbursed.

(Authority: 38 U.S.C. 3534)

* * * * *

Subpart F-3--Service Members Occupational Conversion and Training

Program

12. The authority citation for subpart F-3 is revised to read as

follows:

Authority: 10 U.S.C. 1143 note; sec. 4481-4497, Pub. L. 102-484,

106 Stat. 2757-2769; sec. 610, Pub. L. 103-446, 108 Stat. 4673-4674,

unless otherwise noted.

13. Section 21.4820 is amended by removing paragraph (a)(3)

introductory text; redesignating paragraphs (a)(3)(i) and (a)(3)(ii) as

paragraphs (a)(3) and (a)(4), respectively; and paragraph (a)(1) and

newly redesignated paragraph (a)(4) are revised to read as follows:

Sec. 21.4820 Job training program approval.

(a) * * *

(1) The training provided under an employer's job training program

must be in a field of employment providing a

[[Page 29297]]

reasonable probability of stable, long-term employment and such

training must be provided for a period of not less than 6 months.

* * * * *

(4) If a job training program requires more than 18 months (or the

equivalent in training hours) of training to complete, the period of

training approvable for purposes of this subpart will be limited to the

first 18 months (or the equivalent in training hours) of training under

that program, or a period of training not to exceed 18 months (or the

equivalent in training hours) from the point at which the eligible

person enters the program in the case where the employer grants credit

for prior training. (See Sec. 21.4832(a)(3)).

(Authority: 10 U.S.C. 1143 note; sec. 4481-4497, Pub. L. 102-484,

106 Stat. 2757-2769, as amended by sec. 610, Pub. L. 103-446, 108

Stat. 4673-4674)

* * * * *

14. In Sec. 21.4830, paragraph (b)(2) is revised to read as

follows:

Sec. 21.4830 Entrance into training.

* * * * *

(b) * * *

(2) The eligible person may enter the job training program on or

after the date the notice of intent to hire described in paragraph (a)

of this section is submitted to VA. However, VA may not provide

assistance to the employer if, within two weeks after the date on which

the notice of intent to hire is transmitted to VA, VA disapproves the

eligible person's entry into that program due to a lack of funds.

* * * * *

15-16. In Sec. 21.4832, paragraph (d)(1) introductory text is

revised to read as follows:

Sec. 21.4832 Payments to employers.

* * * * *

(d) Limitations on amount of payments. (1) In no case will the sum

of the periodic payments and the lump-sum payment made to an employer

for all programs of training that an eligible veteran may pursue with

that employer exceed:

* * * * *

Subpart K--All Volunteer Force Educational Assistance Program

(Montgomery GI Bill--Active Duty)

17. The authority citation for subpart K is revised to read as

follows:

Authority: 38 U.S.C. 501(a), chs. 30, 36, unless otherwise

noted.

18. In Sec. 21.7020, paragraph (b)(29) is revised and paragraph

(b)(43) is added, to read as follows:

Sec. 21.7020 Definitions.

* * * * *

(b) * * *

(29) School, educational institution, institution. The terms

school, educational institution, and institution mean--

(i) Any vocational school, correspondence school, business school,

junior college, teachers' college, college, normal school, professional

school, university or scientific or technical institution;

(ii) Any public or private elementary school or secondary school

which offers courses for adults, provided that the courses lead to an

objective other than an elementary school diploma, a high school

diploma or their equivalents; and

(iii) An entity, during the period beginning on November 2, 1994,

and ending on September 30, 1996, other than an institution of higher

learning, that provides training required for completion of a State-

approved alternative teacher certification program.

(Authority: 38 U.S.C. 3002(8), 3452(c); Pub. L. 98-525, Pub. L. 103-

446)

* * * * *

(43) Alternative teacher certification program. The term

alternative teacher certification program, for the purposes of

determining whether an entity offering such a program is a school,

educational institution or institution as defined in paragraph

(b)(29)(iii) of this section, means a program leading to a teacher's

certificate that allows individuals with a bachelor's degree or

graduate degree to obtain teacher certification without enrolling in an

institution of higher learning.

(Authority: 38 U.S.C. 3452(c))

19. In Sec. 21.7045, paragraph (a)(1), paragraph (b), introductory

text, and the authority citations for paragraphs (a) and (b) are

revised, to read as follows:

Sec. 21.7045 Eligibility based on involuntary separation or voluntary

separation.

* * * * *

(a) * * *

(1) The individual--

(i) If not a member of the Coast Guard, must be on active duty or

full-time National Guard duty either on September 30, 1990, or after

November 29, 1993, or if a member of the Coast Guard, must be on active

duty after September 30, 1994, and

(ii) After February 2, 1991, must be involuntarily separated, as

that term is defined in 10 U.S.C. 1141, with an honorable discharge; or

* * * * *

(Authority: 10 U.S.C. 1141; 38 U.S.C. 3018A)

(b) Additional requirements for those individuals voluntarily

separated after October 23, 1992, or involuntarily separated. An

individual who meets the requirements of paragraph (a)(1) of this

section; or an individual who meets the requirements of paragraph

(a)(2) of this section and who either was not a member of the Coast

Guard and was separated after October 22, 1992, or who was a member of

the Coast Guard and was separated after September 30, 1994, must meet

the following additional requirements in order to establish eligibility

for educational assistance:

* * * * *

(Authority: 38 U.S.C. 3018B)

* * * * *

Sec. 21.7120 [Amended]

20. In Sec. 21.7120, paragraph (c)(1)(ii)(D) is amended by removing

``and before October 1, 1994''.

[FR Doc. 96-14363 Filed 6-7-96; 8:45 am]

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